Abstract. Productivity remains an intriguing subject and a dominant issue in the construction sector, promising cost savings and efficient usage of resources. Productivity is one of the most important issues in both developed and developing countries. The developed countries are aware of the importance of economic growth and social welfare. The developing countries which face unemployment problems, inflation and resource scarcity seek to utilise resources and in such a way to achieve economic growth and improve citizens’ lives. Productivity is an issue of particular importance to projects located within the Gaza Strip, as it is considered a newly-developed area, and a huge number of projects have been planned for the near future. The aim of this research is to identify factors affecting labour productivity within building projects, and to rank these factors according to their relative importance from a contractor’s viewpoint. The analysis of 45 factors considered in a survey indicates that the main factors negatively affecting labour productivity are: material shortage, lack of labour experience, lack of labour surveillance, misunderstandings between labour and superintendent, and drawings and specification alteration during execution. Keywords: productivity, labour, building projects, improvement.

1. Introduction There is no doubt that construction is a key activity within any economy; it influences, and is influenced by, the nation’s gross domestic product (GDP) (Cox et al, 1998, cited in Madi, 2003). Given the uncertainties, management is to deal with, the construction industry is a risky one. While these risks may be derived from either external or internal factors, external factors have a greater influence on construction industry than the internal ones (Zhi, 1995). The construction sector in Palestine experienced a considerable growth in the aftermath of 1967; its share of GDP increased from less than 9 % in 1985 to more than 23 % in 1995. During that period the sector’s contribution fluctuated in an upward long-run trend bounded by 9 % and 19 % from 1970 to 1980, and by 15,2 % and 23 % from 1989 to 1995 (PECDAR, 1997). However, it appears that in 2004 the construction sector’s contribution to the GDP was reduced to 9 % due to the second Intifada in Palestine (World Bank, 2004; PCBS, 2004). Due to increased demand from the first Intifada, and to accommodate Palestinian returnees from the Gulf following the first Gulf War, the construction sector experienced a steady increase from 1991 onwards. The 1994 peace process accelerated this increase, particularly after the return of many Palestinians with the Palestinian National Authority (MAS, 2001). Expansion of construction activities has generated numerous jobs for skilled,

semi-skilled, and unskilled labour. Fig 1 shows the distribution of the labour force within the construction sector from 1997 to 2001 (PASSIA, 2002). Building construction is one of the pioneer sectors that achieved high growth rates during the last two decades, and played a crucial role in absorbing gradual injections into the Palestinian labour force (PCBS, 2004). 12,60 % 1996 15,10 % 2001

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